On 28 June 2012, ESMA published a consultation paper on Proposed Guidelines on Sound Remuneration Policies under the Alternative Investment Fund Managers Directive (or AIFMD).  The proposed guidelines will apply to managers managing alternative investment funds, including hedge funds, private equity funds and real estate funds, and will require the introduction by such funds of sound and prudent remuneration policies and structures. The guidelines are aimed at increasing investor protection and moving the financial services industry away from a culture of financially incentivised risk-taking by key staff members.

On the 6 July, ESMA published two final sets of guidelines under the Markets in Financial Instruments Directive (or MiFID) relating to (a) the suitability of investment advice and (b) the compliance function.  The guidelines, directed at both market participants and national competent authorities, are aimed at enhancing the protection of investors in the EU and promoting greater convergence in the interpretation of, and supervisory approaches to, the MiFID suitability and compliance requirements